What Is Civil Litigation?

Economics of a Civil Lawsuit

A civil lawsuit is so expensive these days that it is not typically affordable unless the attorney is willing to contract with the client on the basis of contingency. However, because lawyers rarely accept defense cases on a contingency basis, the defendant of a civil lawsuit usually has little choice but to defend the action on an hourly fee basis. That raises questions: Why are lawyers so expensive? How can the law be for all of the people if it is only affordable to the wealthy? Why do “good” law firms charge so much money? What is a “good” law firm? How important are lawyers who are specialists; why can't any lawyer handle any matter?

$50,000.00 Cases: While it may be difficult to say with certainty how much an average lawsuit costs, typical lawsuits have, from the author's experience, been known to cost up to about $50,000 in legal fees and costs. For example, $25,000.00 can easily be estimated as a reasonable cost to defend against a civil lawsuit prior to trial preparation. The attorney's fees for trial preparation and the trial itself could also run up to $25,000.00. Can the average defendant, or an average plaintiff for that matter, afford legal representation?

Hourly Charges: Defense lawyers typically charge their clients by the hour and the average going rate is between $200.00 -$350.00 per hour, depending on the lawyer, the law firm, the nature of the case. Every action taken by a lawyer is a billable transaction. All phone calls are billable, including client calls and emails seeking to be reassured. Legal Process: Preparing and filing the answer to the complaint are usually the first official steps in the legal process. A good lawyer might reasonably spend up to 15 hours taking all the steps necessary to prepare and file an answer; thus, depending on the lawyer's hourly rate, that initial task may cost up to $5,000.00. The filing of an answer to a complaint reduces a lot of pressure on both the lawyer and the client and ensures that the defendant's default is avoided. That is why most attorneys will usually request a retainer fee between $5,000.00-$7,500.00 plus costs upfront.

The process called discovery is next, during which interrogatories (written questions) and depositions (face-to-face attorney questioning of witnesses recorded by a stenographer) are held by both sides.

The Purpose of “Discovery”: The public would do well to understand that the legal process was changed decades ago to allow both sides the right and opportunity to find out all of the relevant facts on which the other side is relying. The other aim of discovery is to allow for the lawyers to eliminate legal theories that are not supported by the facts prior to the trial — so as to eliminate surprises at trial and save the precious time of very overcrowded courts.

To many clients, whose idea of lawyering is courtroom work, the largely invisible discovery period does not seem like it should gobble up as much money as it does. To the attorneys, however, the discovery period is where the winning case is shaped and where the foundation is laid for a successful outcome. Essentially, the unglamorous, hard grind, but necessary work, is completed during the discovery period. Depending on the complexity of a given lawsuit, the number of witnesses, and the volume of documents involved, $15,000.00 can easily be consumed during discovery. Summary Judgment Motion: At some point during the discovery period, the defense or plaintiff s lawyer may, if s/he believes that appropriate facts and circumstances exist, ask the court to rule that the plaintiff has no case or that the defendant has no viable defense. This procedure is called a motion for Summary Judgment. Under the philosophy that everyone is entitled to his or her day in court, judges are reluctant to rule for defendants in this procedure unless there is absolutely no case for the plaintiff or no defense for the defendant. If the defendant prevails, the case is over — without a trial. $5,000.00 - $10,000.00 can easily be consumed in a Summary Judgment motion. By this time, $25,000.00 - $30,000.00 could easily have been billed — and, often, the defendant client will feel it is worth the price if things end there. Things do not, however, usually end there; and the client will likely become inclined to believe that the unsuccessful procedure was an unnecessary and wasteful use of his or her money. Noteworthy is the fact that lawyers cannot predict the outcome of a given lawsuit. This inability to predict outcomes should not - and often does not - deter the good lawyer from presenting arguably correct motions. It should also be noted that while the court might not grant the summary motion in full, and thus completely disposing of the case, it may nonetheless grant it in part and thus pairing down the issues to be tried. This will help in preparing for trial and actually reduce the fees for the trial.

Settlement Negotiations: As the facts are collected and the strength of the plaintiff's case and defendant's defense are respectively re-evaluated, attempts will usually be made to find a dollar amount (if appropriate) at which the whole matter can be dropped so that people can go back to making money. Sometimes, a settlement can be effected. However, depending on the passion involved, the matter may sometimes fail to settle. And, $5,000.00 can be consumed in settlement negotiations, which often involve mediation or settlement conferences before a neutral mediator or judge.

Trial Preparation: Prior to the courtroom theatrics, a whole lot of largely invisible work will be billed to the client as the lawyer organizes the facts for a logical presentation at trial. During this stage, a lawyer also spends a great deal of time interviewing and preparing the witnesses who will be called to testify at the trial. This also might include preparing motions such as Motions in Limine—to exclude evidence, testimony, etc. As much time can be consumed in the preparation for the trial as will be spent at trial. $8,000.00 can be easily consumed during trial preparation.

Trial: Taking a lawyer out of his or her office for the entire work (billing) day will cause a client to be charged for the entire time — including the time during which both lawyer and client are at court waiting to be assigned a courtroom. For example, eight hours times $350.00 per hour will cause a defendant to be charged $2,800.00 for each day of trial. Imagine a five-day trial for a “simple” matter that revolves around the trier of fact (judge or a jury) believing or disbelieving one set of facts or another. $14,000.00 is easily consumed. Double the days to ten (10) days, and $28,000.00 is easily consumed. This also doesn't include preparation after the court day is over for the next day in court.

Bottom line------In the end, either you win or you lose. Sometimes with the costs involved, you can lose for winning.

(Note—the above only represents an estimate of costs. Every case is different)